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Airline profits could feel squeeze from Tropical Storm Harvey
August 29, 2017 / 4:44 PM / 4 months ago

Airline profits could feel squeeze from Tropical Storm Harvey

NEW YORK (Reuters) - Tropical Storm Harvey has already caused thousands of flight cancellations around Houston and could cripple regional aviation through the U.S. Labor Day holiday, taking a bite out of airline profits during one of the year’s busiest travel periods.

Vehicles queue to deliver supplies for Hurricane Harvey evacuees at the nondenominational Lakewood Church, founded by pastor Joel Osteen, in Houston, Texas, U.S. August 29, 2017. REUTERS/Ernest Scheyder

Since making landfall on Friday, the deadly storm has dumped several feet of rain on Houston and surrounding areas, forcing the temporary closure of three airports.

Normal regional airline operations will likely not resume until Wednesday or Thursday, even under the best-case scenario.

The Houston airport authority has not said when it will reopen, but the Federal Aviation Administration said it would not be before Wednesday for Hobby Airport and Thursday for Houston Intercontinental Airport.

“They are going to be opened when conditions allow us to operate safely. Period. I don’t want to put a date on it,” Houston Airports System spokesman Bill Begley said.

A government official briefed on the matter said with limited jet fuel in place and impassable roads, Houston airports may officially reopen this week but are not likely to resume anything close to full operations until next week.

Currently just one road to Hobby is open and all roads near Houston Intercontinental remain impassable. A big issue is getting TSA officials, flight crews and passengers to the airports.

This could mean service disruptions that last through the close of the Labor Day travel period, which had been projected to be even busier than normal this year. [L2N1L11ZH]

The exact financial impact was not yet known, but even minor storms can cost airlines millions of dollars. A late winter storm earlier this year forced Delta Air Lines Inc to cancel thousands of flights, resulting in a $125 million negative impact.

Since Sunday, airlines have canceled more than 5,000 flights into and out of Houston, including all scheduled flights through Wednesday, according to the air travel monitoring website flighware.com.

“There is no question that the devastation affecting one of the largest metropolitan centers in the United States and a major air travel hub, as well as outlying areas and other cities in the region, will curtail the passenger volumes previously projected for this period,” said John Heimlich, vice president and chief economist of trade group Airlines for America.

Southwest Airlines Co, one of the region’s largest carriers, said it was possible the storm could prohibit normal flight schedules at Houston Intercontinental and New Orleans International airports through Sept. 5.

The seven-day Labor Day travel period stretches from Wednesday, Aug. 30 through Tuesday, Sept. 5.

United Airlines, which has a major hub operation in Houston, has canceled about 2,000 flights through Thursday.

Reporting by Alana Wise and David Shepardson; Editing by Meredith Mazzilli and Andrew Hay

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